'Travel Agency Selling "Save 40,000 Won Monthly for Overseas Trips" Suddenly Bankrupt Before Maturity... Tens of Billions in Damages'

Sudden Bankruptcy Filing Ahead of 4-Year Maturity
Over 1,200 Victims and More Than 2.5 Billion KRW in Damages

A small and medium-sized travel agency in Daejeon, which had been selling installment travel products, suddenly went bankrupt. There are about 1,200 victims, and the amount of damage reaches tens of billions of won, but recovery of the damage is expected to be difficult.

The agency's main product was an installment plan that allowed customers to pay monthly and use the accumulated money to take a desired trip. By paying 40,000 won per month per account, after four years, customers would receive 2 million won, which they could use to freely choose travel products at their preferred time, place, and form. Additionally, if they were unable to travel, a full refund was promised upon maturity.

Notice on the homepage of a travel agency in Daejeon that suddenly went bankrupt after selling installment travel products
[Image source=Yonhap News]

Sales agents and other business operators paid a deposit ranging from 3 million to 13 million won to the company and conducted sales nationwide in Seoul, Cheonan, Busan, and other cities. However, as the maturity date approached, the travel agency’s CEO, Mr. A, suddenly filed for bankruptcy in May, citing financial difficulties making it impossible to continue operations. The Daejeon District Court’s 1st Bankruptcy Division declared the company bankrupt on the 26th of last month.

Mr. A stated in a notice on the company’s website, "Having received the bankruptcy ruling, it has become difficult to provide travel and membership services, so all operations have been suspended. We deeply apologize for causing great disappointment to our members. We will seek ways to minimize the losses of our members as much as possible in the future." The number of victims amounts to 1,277, and the damage totals approximately 2.52 billion won.

As small and medium-sized travel agencies repeatedly went bankrupt due to COVID-19, this company also received inquiries from worried customers. However, the CEO reportedly reassured them by saying, "Since you are only paying money without actually traveling, it is rather okay," which has drawn criticism. The victims plan to file a police complaint against Mr. A on charges of fraud.